On Monday, bitcoin's price plummeted to $79,074 during Asian trading hours, marking a nearly $1,500 decline from its intraday high of $80,594, the highest level since January 31. The downturn was triggered by a report from Iran's Fars news agency stating that two missiles had struck a US patrol boat near Jask Island, allegedly after the vessel ignored Iranian warnings to leave its territorial waters.

As a result, Brent crude prices skyrocketed by over 5% to above $113 per barrel before slightly paring the gain. However, the US promptly denied the report, stating that no American ship had been hit. Although oil and equity futures pared their initial moves following the denial, bitcoin's decline persisted as traders factored in the fragility of the ceasefire that has been in place since early April.

Other major cryptocurrencies followed bitcoin's downward trend from their intraday highs but remained positive for the day. Ether traded at $2,341, up 1.2% over 24 hours after reaching $2,368 earlier. Solana was priced at $84.08, up a mere 0.2% on the day after starting Monday at $85.14.

XRP dropped to $1.40, while BNB fell to $623. Dogecoin, however, held its gains relatively better, rising 2.3% on the day to $0.1102, with its weekly print still at 12.1%.

The escalation occurred just hours after President Donald Trump announced on Truth Social that the US would commence escorting ships stranded in the Persian Gulf through the Strait of Hormuz, starting Monday, as part of an operation dubbed Project Freedom. This operation involves guided-missile destroyers, aircraft, and drones.

In response, Iran declared that it had 'redefined the control zone' in Hormuz, extending its claimed maritime borders to Fujairah and signaling that Tehran would regulate shipping traffic in the area, regardless of US operations. Earlier on Monday, bitcoin had broken the $80,000 barrier for the first time since January, resulting in $301 million in shorts being liquidated as the move unfolded. The Senate's Clarity Act compromise on stablecoin yield, released on Friday, had contributed to the risk-on tone heading into the week.

The US denial's validity and any potential fresh confirmations from either side are likely to set the tone for the remainder of the US session.